The comments of the board of directors of Shunxin Agriculture (111861) in the first half of 2121 are as follows:

I. Overview

(i) Overall operation

During the reporting period, the company achieved operating income of 9.52 billion yuan, up by 13.12% year-on-year; The net profit attributable to shareholders of listed companies was 548 million yuan, a decrease of 15.36% over the same period of last year. Among them, the operating income of liquor industry was 6.466 billion yuan, a year-on-year decrease of 2.89%; The operating income of the pork industry was 2.664 billion yuan, up 81.32% year-on-year. In terms of revenue scale, liquor industry and pork industry are the two largest business segments of the company, accounting for 67.92% and 27.98% of the company's total operating income respectively.

(II) Industrial operation

1. Liquor industry

During the reporting period, the company's liquor closely revolved around the "fourth five-year plan" strategy, implemented the overall marketing idea of "deep distribution, restructuring and establishing a model", adhered to the market orientation, and made "Niulanshan" a "famous liquor" among "people's liquors".

in the second half of the year, the company's liquor business started from three aspects: building three strategic areas, cultivating "1+4+N" model market and exploring digital marketing to promote the high-quality development of Niujiu. First, build three strategic areas: Beijing-Tianjin-Hebei, Yangtze River Delta and Pearl River Delta; Second, focus on cultivating a standardized and standardized model market with Beijing as the center, Nanjing, Changchun, Dongguan and Suzhou, which have begun to take shape as multi-cores, and many future foreign model markets as multi-points; Third, online and offline measures are taken simultaneously, and online digital marketing and offline experiential marketing are organically combined to meet consumers' emotional demands for perception and experience, add temperature to digitalization and precipitate the brand fan base.

2. Pork industry

According to the data of the National Bureau of Statistics, from October to June 2121, there were 341 million live pigs in China, down 2.2% year-on-year; 251 million heads were slaughtered, a year-on-year decrease of 19.9%; The output of pork was 19.98 million tons, a year-on-year decrease of 19.1%. Affected by COVID-19 epidemic, African swine fever epidemic and cyclical factors, the stock of live pigs and fertile sows continued to decline, and the market supply tightened in stages; At the same time, the normalization of African swine fever epidemic will speed up the withdrawal of free-range households.

The pig breeding industry has optimized the stock management, and the base construction has been steadily advanced. By combing the advantages and conditions of the stock resources of the pig breeding sector, the company has implemented the field closure management for all livestock farms, increased the disinfection control measures for seven streams, such as people flow, vehicle flow, logistics, pig flow, biological media flow, feed flow and sewage logistics, strictly guard against death, continuously upgrade the biosafety prevention and control system of livestock farms, and strengthen the prevention and control of African swine fever. The breeding farm project of binary breeding pigs and commercial pigs in Hanzhong, Shaanxi Province has been basically completed, and the construction project of American original breeding pig farm and breeding demonstration farm for breeding pigs and commercial piglets is being carried out in an orderly manner, which is further away from realizing the integration of "breeding pig breeding, pig breeding, slaughtering and processing, and brand pork sales" and forming the industrial pattern of Shunxin agricultural pig brand products produced and sold in Hanzhong area.

the fresh food industry is strategically adjusted and actively laid out. Affected by the COVID-19 epidemic, the sales of wholesale markets for farmers, schools and restaurants declined, while the sales of large supermarket chains and online e-commerce increased. Based on the changes in the external market environment, the company quickly adjusted its strategy, actively cooperated with "self-operated stores in JD.COM", "Meituan" and "Daily Fresh", and laid out terminal sales channels such as Beijing Daoxiang Village and Pengcheng Specialty Store to further expand its market share and brand influence. Fresh sales have made great progress in the context of declining industry sales.

3. Other industries

During the reporting period, the regulation and control of the real estate industry continued to deepen, and the characteristics of policy and market differentiation in different regions were obvious. The company's real estate business accelerated its sales progress, but in the short term, the overall performance was still under pressure. At present, the company's main sales projects are: Beijing Yihe Tianjing Project (Phase 1), Hainan Fuhai Jiayuan Project and Baotou Wangchaoyuan Project. The company strictly controls the project cost and progress, strengthens advertising and channel expansion, and strives to promote inventory destocking.

iii. analysis of core competitiveness during the reporting period, the core competitiveness of the company did not change significantly. (1) Liquor brewing and sales 1. Brand and cultural advantages Brand is one of the core competitive factors of liquor industry, and it is scarce because of its historical inheritance. Erguotou, as the representative of Beijing liquor, has a history of more than 811 years. According to the Records of Shunyi County in the Republic of China, "Niulanshan Town has more than 111 workers (employed by eleven cooking pots in the province), and the wine brewed is a special product of Beiping, which is sold to neighboring counties or Pingshi, and is quite popular, especially Niulanshan's wine." Niulanshan Winery, a subsidiary of the company, is the first Chinese time-honored enterprise to put forward the concept of "inheritance chain", and for the first time, it held the "hundred-year-old inheritance of Beijing wine vein" and sealed the wine meeting with its master; It is also the first liquor enterprise to incorporate the technological standard-"Erguotou Standard" into the national standard, and its "Beijing Niulanshan Erguotou Liquor Brewing Technique", as a representative of the traditional brewing technique of Beijing Erguotou Liquor, has also been included in the national intangible cultural heritage list. Niulanshan's ingenious spirit of striving for perfection and constantly surpassing ensures that the brand appeal of "authentic Erguotou, authentic Beijing flavor" is deeply rooted in people's hearts, becoming a representative of Erguotou category and a people-friendly brand in people's minds, and also a "business card" representing Beijing's regional culture. "Shunyi, Beijing", where Niulanshan Winery is located, won the title of "World Famous Wine Producing Area", and the brand and culture with Niulanshan characteristics were further recognized. 2. Market and Channel Advantages According to the actual development, the company strengthens the management of terminal construction, strives to improve the quality of marketing teams, establishes a nationwide marketing service network system, comprehensively strengthens market management, and enhances marketing service capabilities. The company has consistently practiced the humanistic marketing concept of "harmony * * * and cooperation * * * to win", which has comprehensively enhanced the confidence and loyalty of the majority of dealers to the "Niulanshan" brand. The company has always adhered to the marketing idea of "deep distribution, structural adjustment and model building", and the process of nationalization has been further promoted, and the results of model market building have appeared. Nanjing, Changchun, Dongguan and Suzhou markets have begun to take shape. 3. Advantages of Technology and Talents Relying on the scientific research advantages of the first "Post-Doctoral Research Center" in Beijing liquor industry, the company actively carried out "Industry-University-Research" cooperation with foreign countries, which greatly improved the scientific research strength of enterprises. Niulanshan has always been adhering to the spirit of ingenuity, relying on scientific and technological research and development to deeply understand and master the flavor of Niujiu, forming the style of Niujiu, and enabling science and technology to be a national good wine. In 2119, Niulanshan set up an academician workstation after the postdoctoral workstation, welcoming two academicians to settle in and carry out research work around bio-fermentation and flavor technology, which will inject new scientific research strength and technology into the winery. (II) Breeding of breeding pigs, pig breeding, slaughtering and meat processing 1. Brand advantages Pengcheng Food, a subsidiary of the company, has the largest safe pork production base and a perfect food safety guarantee system in Beijing, which is the Beijing Olympic Games, the Youth Olympic Games, the APEC International Conference, the National People's Congress, the Beijing Municipal People's Congress, the second Belt and Road International Cooperation Summit Forum, the Asian Civilization Dialogue Conference, the Africa Forum, the 2119 Beijing World Expo, and the establishment of New China. The company has won many awards, such as "CPICP Benchmarking Agriculture, Animal Husbandry and Food Enterprise", "China Top Ten Cold Fresh Pork Production Enterprise", "China Top Ten Pig Industry Chain Benchmarking Enterprise" and "National Pig Slaughtering Standardization Demonstration Factory". Its product brand "Pengcheng" has successively won more than 111 honors such as Brand Pork Award, 5A Grade High Quality Pork Award, National Best-selling Brand of Three Green Projects, and China (Agricultural Industry) Industry Leading Brand Award. It has great influence and high reputation in the Beijing market, and its products are famous for their high quality. 2. Advantages of the whole industrial chain The pork industry of the company has formed a whole industrial chain integrating "breeding pig-pig breeding-slaughtering and processing-deep processing of meat products-cold chain logistics and distribution". On the one hand, it has obvious competitive advantages in food safety, disease prevention and control, cost control, resource allocation and standardization, large-scale and intensive production; On the other hand, in the face of the "pig cycle", the whole industrial chain can be flexibly adjusted according to market conditions, effectively coping with the risks brought by market price fluctuations. Benign interaction, deep integration and coordinated development among all links in the whole industrial chain. 3. Technical advantages In breeding pigs, Xiaodian Breeding Farm, which belongs to the company, was founded in 1978. It is one of the earliest enterprises engaged in breeding pigs in China and introducing excellent varieties from abroad. It is a "national pig core breeding farm" and a "national key breeding farm" and has also become an important base for scientific research and cultivation of breeding pigs in China. In order to improve the quality of breeding pigs, the company has established long-term cooperative partnership with China Agricultural University and China Academy of Agricultural Sciences, carried out research on breeding technology, feeding management and nutrition of breeding pigs, and applied the research results to the daily production of pig farms, fully realizing the organic transformation from scientific and technological achievements to productivity. The company also uses advanced breeding methods and computer software at home and abroad to scientifically select breeding pigs, and all performance data management, breeding pig evaluation and file management are computerized. At the same time, it takes the lead in applying molecular genetics gene technology to breeding pigs in China, which greatly improves the production performance of breeding pigs. In the first half of 2121, the company actively promoted the transformation of scientific and technological achievements, and jointly completed the declaration of the National Science and Technology Innovation Award "Research and Industrialization of Digital Storage Cold Chain Logistics and Precise Loss Preservation Technology for Raw Meat" with China Academy of Agricultural Sciences; Four innovative achievements, including "Research on Key Technologies of Aerospace Meat Processing", won a first prize and 1 titles of "Innovation Studio".